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Thursday, August 1, 2013

ISM Manufacturing Index Improved in July

The ISM manufacturing index rose to 55.4 index points in July, a 4.5 point rise from the previous month. The index is at its highest level since June 2011. July marks the second consecutive monthly gain since the index fell into contractor territory in May.



The details of July’s report were improved as well. Production was strong in July, rising 11.6 points to 65.0. The employment index also saw notable gains, rising 5.7 points to 54.4 and back into expansionary territory. New orders improved 6.4 points, settling at 58.3.

Not all of the details were positive however. Export orders declined 1.0 index points to 53.5 and backlogged orders dropped 1.5 index points to 45.0.

Inventories dropped by 3.5 points, settling at 47.0. The gap between new orders and inventories is a proxy for future production. The decline in inventories coupled with the growth in new orders created a strong proxy for July. The gap increased to 11.3 points, up from 1.4 the previous month.

Read the ISM release.

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